Stated book value definition and examples

Analyzing the definition of key term often provides more insight about concepts. A value assigned to common stock by the firms management for purposes of financial statements. Book value definition and meaning collins english dictionary. In just one minute, the book value as well as the pb ratio have been explained, an explanation which takes us from the basics definition and formulas to logical examples.

There are several definitions associated with the term book value and. Most items lose value over time and are not worth their original. Definition of book value in accounting, book value refers to the amounts contained in the companys. Stated value stock is nopar stock that is assigned a value at issuance for accounting purposes. For example, real estate owned by a company may gain in market value at.

Stated value, used in place of par value, is calculated on a pershare basis by dividing the stated capital resulting from a new issue of common stock by the number of new shares issued. Depreciation and accumulated depreciation depreciation is defined as the periodic decline in value an item. Book value is the value of a single share of stock, calculated by dividing the value of the company by the number of shares it has issued. A stated value is an amount assigned to a corporations stock for internal accounting purposes when the stock has no par value. Net book value, also known as net asset value, is the value a company reports an asset on its balance sheet. Net book value definition, formula, examples financial. The buyback price was 38% below the stocks book value. What is book value per share and how can it help you in. In most cases, you may be interested in a new car but do not. Book value definition and usage business economics. In other words, its a share of stock that isnt assigned a par value by the corporate charter. Asset book value definition what is asset book value. Net book value definition, formula, examples financial edge.

Asset book value definition including break down of areas in the definition. Book value is the value of a single share of stock. Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. To define net book value, it can be rightly stated that it is the value at which the. Examples of stated in a sentence recent examples on the web the stated goal of the attackers was to inflict major economic damage on egypt by choking its tourist industry. The book value of an item is equal to its cost minus accumulated depreciation.

Tradein values are usually lower than the retail values. A companys total intrinsic value can be stated as economic book value plus the present value of future free cash flows. An items book value is the most accurate depiction of what it is currently worth. An assets book value is equal to its carrying value on the balance. Continuing the abovementioned examples, the shares outstanding for microsoft on june 30, 2019 end of microsofts. It is calculated as the original cost of an asset less accumulated depreciation, accumulated amortization, accumulated depletion or accumulated impairment. Theoretically, book value represents the total amount a. Also defined as a firms next asset value, book value per share is. We mentioned above that you deduct accumulated depreciation from the original cost of an asset to. Today well ignore free cash flow to focus on the first part book value. Maturity or par value of the bonds reported as a credit balance in bonds payable. Stock, corporate value or balance sheet simply stated as the equity value of a company divided by.

The book value literally means the value of a business according to its books accounts that is reflected through its financial statements. When the share is issued to the owner, management assigns its value, so the accounting department can record the transaction. They were asked to pay about ten times the book value of the stock. Simply stated, book value per share defines the accounting value i. Book value is calculated by taking a companys physical assets including land, buildings, computers, etc. Book value definition of book value by merriamwebster. Book value total assets intangible assets liabilities.